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Business experts doubtful regarding future profits and sales

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January 26
1:20 AM 2016

Business economists seem to be more doubtful regarding their companies' future profits and sales. According to a survey, these economists expect slower GDP growth. However, a majority of financial experts polled by the National Association for Business Economics said their companies expect to increase wages in the following quarter.

Apart from the expected wage hike, the survey presents a gloomier picture of the economy growth at the beginning of the year 2016. According to abcNews, less than half the financial expert anticipate their company's sales to increase in the first three month of the year, which represents the smallest rate since January 2015. Meanwhile, almost 20% of the economists polled anticipate their profit to drop the highest in more than per year.

More than 25% of the business expert anticipate that growth will fall beneath 2% over the previous year. In April, 30% of the economists anticipated that growth would climb 3% in the next 12 months but the numbers dropped to 4% in the recent poll.

The poll results, which was conducted from December 17 over January 15, showed few positive signs. Beyond the expected pay hike for the first three month of the year, almost half of the financial expert said that their companies had already increased wage in the fourth quarter of 2015, which is the utmost percentage in over a decade.

One-third of the economists said their companies have planned to increase jobs in the following three months, an increase from 29% in the drop and the number expecting to trim jobs increased to 15%. According to 62% of the financial experts, the Federal Reserve's interest rate hike on December 1 will not have an impact on their firm.

In January, hiring activity and business confidence in China dropped to a record low, Reuters said quoting a survey report. January Sales Managers' index slipped to 51.0 from 51.7 in the previous month. However, the index has averaged 51.4, which indicates that China's GDP is still developing progressively, though at a slower rate than last year.

The Sales Manager's index, which comprises all private sectors, is designed to reflect the overall GDP growth including Market Expansion, Staffing Indices, Prices Charged and Product Sales.

The first portrait of UK GDP are expected to show growth at a modest pace during the last months of 2015. Economists anticipate UK GDP figures to show growth of 0.5 percent in the final quarter of 2015, compared to the growth of 0.4 percent in the prior quarter, The Guardian said quoting a Reuter's survey.

Howard Archer, a financial expert at HIS Global Insight, said factors like low crude oil price and increasing employment rate would help to strengthen UK GDP growth. However, the UK is facing significant global and domestic worries, Howard added.

Howard also said that he expects fourth quarter GDP growth limited again to 0.4 percent over the previous quarter and year-on-year growth to loiter to 1.8 percent.

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